H3G joins T-Mobile Austria in telco auction appeal

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VIENNA, Nov 26 (Reuters) - Hutchison Whampoa’s Austrian telecoms unit said it would appeal against the result of a spectrum auction that cost the country’s three carriers 2 billion euros ($2.7 billion).

The auction, Europe’s most expensive per head of population for fourth-generation (4G) frequencies, took place under strict conditions that allowed the parties no knowledge of each others’ bids to minimise the danger of collusion.

Deutsche Telekom’s T-Mobile Austria also plans a legal challenge, its chief executive has told Reuters, while Telekom Austria, the country’s biggest operator, says it will decide next month whether to appeal.

Hutchison’s H3G, the smallest of Austria’s three carriers, came off worst in the 4G spectrum sale that also re-auctioned frequencies already in use, winning none of the most valuable 800 megahertz spectrum.

T-Mobile and H3G are appealing to the country’s highest constitutional and administrative courts to order a re-run of the auction, arguing that the conditions were designed to maximise profits and endangered competition.

Each of the three parties was allowed to bid for up to 50 percent of the spectrum on sale, leading to the risk that one could have been shut out completely - although the regulator says it would never have allowed that to happen.

H3G’s Chief Executive Jan Trionow said in a statement on Tuesday: “The auction process was illegal in form and in substance. Drei (H3G) was considerably harmed. To simply accept this would be irresponsible.”

The courts are expected to take around two years to rule on the appeals, meaning the operators will go ahead with plans to build their next-generation networks on the frequencies awarded and accept the risk that they may be reallocated in future.